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Incapacity Planning for an Elderly Family Member

May 01, 2015 10:28AM ● By Daniel DuRee

by Daniel DuRee

            You may be familiar with using a durable power of attorney for incapacity planning as part of your estate plan, however, what if you have a family member who has an estate plan in place but starting to lose capacity due to dementia, Alzheimer’s, or simply old age? With some basic steps, you can smoothly transfer management of financial, personal, and healthcare decisions without going through the painful process of declaring someone incapacitated.

                        Transitioning Management of a Trust

            Generally, a person will serve as trustee of a trust until passing away or being declared incompetent by two separate doctors. Only at that time will the successor trustee take control and start managing the trust property. However, management can be more easily transferred by amending the trust and making the first successor trustee a co-trustee. This way, the original trust creator can still help manage the property alongside the co-trustee and eventually leave the co-trustee to do most of the management. Another benefit to this is that the original trust creator need not be declared incompetent and will remain a co-trustee until death. This simplifies tax preparation as well because a separate tax return must be filed when the creator of the trust is no longer a trustee or co-trustee.

                        Transitioning Management of Financial, Personal, and Healthcare Decisions

            Similar to the trust management succession above, most Durable Powers of Attorney and Advance Healthcare directives do not take effect until a person is deemed incapacitated by two doctors. However, if a family member is slowly losing capacity but is presently still competent, an immediate durable power of attorney and/or advance healthcare directive may be created to transition decision making to another person. With an immediate durable power of attorney, for example, the creator can still write checks, file taxes, etc., but their agent can also do these things on their behalf. So, instead of management going from only the principal having authority to only the agent having authority, there is a smooth transition where both parties have legal authority to manage the principal’s finances. 

            If the deteriorating capacity of a loved one is addressed early enough, you can transition management smoothly without having to resort to declaring the person incapacitated or going through the painful conservatorship process.

            As always, please consult with a licensed attorney before you make any decisions regarding incapacity planning. If you have any questions, please don’t hesitate to give my office a call. I am happy to assist you in any way possible. 

 Daniel L. DuRee is a third generation resident of Contra Costa County and a licensed attorney practicing in Walnut Creek. He can be reached at (925) 210-1400 or visit